It's tough to divert people from cash to e-wallet: Freecharge

Founded in 2010, Freecharge is among a growing coterie of companies fuelling the wave of fintech in India. But, the company has managed to set itself apart from competition with increased focus on not just consumer problems, but merchant issues as well.Anu Thomas | ET Online | September 06, 2016, 14:00 IST

The best of us have encountered situations where lack of cash in the wallet triggered a frantic combing of surrounding areas for that elusive ATM. Embarrassing notwithstanding, a deja vu moment is bound to follow sooner or later. Worse yet, when credit cards carelessly left back home, also don't offer any refuge.

Fortunately, quite a few companies today may just be banking on our imperfections or rather simply working to make our lives more than just a disturbing series of events. Founded in 2010, Freecharge is among a growing coterie of companies fueling the wave of fintech in India. But the company has managed to set itself apart from competition with its increased focus on not just consumer problems, but merchant issues as well. Elaborates Chief Business Officer at Freecharge, Sudeep Tandon, "We have deftly been able to introduce solutions that impact both consumers and merchants, bringing in colossal changes in the way transactions are being conducted online," he says.

Tandon illustrates this with an example,"One of our partners McDonald's had approached us with the problem of long lines forming during lunch hours as people waited for OTP-based confirmation on their devices as they make their payment. We then introduced an innovative solution with On-The-Go-Pin where no OTP or even connectivity is required on phones," says Tandon. "It solves both consumer frictions since they can place their order quicker as well as merchant pain point which is serving as many customers in the least possible amount of time. Freecharge is the only player in this space who has a patent for this solution," he adds.

Pocket-friendlyThis may be one of the reasons why the company has seen a steady increase in daily transactions from consumers which currently stand at a million a day. The number of merchants signing up with the system has also jumped in recent months. Freecharge currently has over 1,00,000 merchants on its platform and is looking to jack it up to five million in the next 18 months.

"Calculating daily transacting units is the right approach to ascertain progress in this sector because it shows the intensity and level of engagement on your platform and is the perfect indicator that the company is growing," says Tandon. "Since February, this number has been growing at a steady rate of 15% month-on-month," he adds.

Acquired by Snapdeal in April last year, Freecharge had taken over the e-commerce player's Capital Assist program soon after, opening up its platform to sellers on Snapdeal as well. It recently also signed a partnership with payment gateway provider PayUbiz, where Freecharge customers can further get access to over 10,000 merchants registered with PayUbiz.

Riding highAnother segment the company is looking to tap is taxi services. The company currently enables cashless payments for 15,000 taxi drivers in Delhi, Mumbai and Bangalore and is looking to absorb at least 1,00,000 taxis by the end of this year. "We are targeting sectors both in online and offline spaces which will influence the daily payment habit of consumers and gradually shift them from cash to digital payments," says Tandon. Cab rides are one of the biggest sources of transactions for Paytm which has a strong foothold in this space with its partnership with Uber. "Freecharge is also exploring various partnerships in this category," says Tandon.

But, he knows it may not be an easy ride. "Differentiating ourselves from our contemporaries comes relatively easy to us since both consumers and merchants understand our value proposition well," he says. "The real problem is diverting consumers from cash, since that is something that has been ingrained in the Indian mindset. Urging them to think of something that may be better than cash is the real challenge here," he says.

The company says it has one of the best payment success rates in the country, with taxi drivers and pharmacists, to every big and small merchant adopting this method. "We have a dedicated team pan-India who are in touch with various merchants to bring them on to our platform. At the same time, we have enabled merchants to self sign-up as well, helping them easily integrate with Freecharge," says Tandon. "Ultimately, players that focus on understanding the problem deeply and creating the right solutions to solve those problems are the ones that are going to succeed in this space going forward," he adds.

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